Crude oil prices stabilized today after inching up on Tuesday following the news of new U.S. sanctions on people involved in exporting Iranian crude disguised as Iraqi crude.
At the time of writing, Brent crude was trading at $68.93 per barrel and West Texas Intermediate was trading at $65.42 per barrel, both slightly down from opening.
On Tuesday, the U.S. Treasury Department announced a round of sanctions on a network involved in selling Iranian crude abroad after blending it with Iraqi crude in order to disguise its real origin.
“By targeting Iran’s oil revenue stream, Treasury will further degrade the regime’s ability to carry out attacks against the United States and its allies,” Treasury Secretary Scott Bessent said in a statement.
The U.S. is also annoyed that Brazil has become a major buyer of Russian diesel, with media reporting that Washington was considering trade measures to “punish” Brazil for this.
Meanwhile, there are expectations that U.S. inventories declined last week. Ahead of the weekly reports of the American Petroleum Institute later today and the Energy Information Administration on Thursday, three analysts who Reuters polled estimated the draw at 3.4 million barrels for the last week of August.
OPEC+ is meeting this weekend, with no surprises expected from the meeting and the majority of observers assuming the group will make no changes to its production levels for October. ING noted in an update that OPEC+ had already returned 2.2 million barrels daily to the market over the last six months and that “The scale of the surplus through next year means it’s unlikely the group will bring additional supply onto the market.”
There is, however, another risk—that OPEC+ decides to curb production again in the face of that expected surplus. It appears that the surplus everyone seems to expect might not, in fact, be as massive as described, if a fresh round of OPEC+ is seen as an upside risk for oil prices.
By Irina Slav for Oilprice.com
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